Questions surrounding oil shale led to its omission from a new study analyzing the economic and the environmental trade-offs of unconventional fossil fuels.
The RAND Corp., a nonprofit research group, issued the study last week. It ended up focusing on oil sands and coal liquefaction, also known as coal-to-liquids.
“Although oil shale is also an important potential unconventional fossil resource, we do not address it in this report because fundamental uncertainty remains about the technology that could ultimately be used for large-scale extraction, as well as about its cost and environmental implications,” RAND said in the report summary.
RAND representatives could not be reached for comment late last week.
Bobby McEnaney is a staff advocate for the Natural Resources Defense Council, which he said contributed expert comments during the draft process for the report.
“The original goal of the report was to take a hard look at all of the potential unconventional fuels, but they ultimately punted on oil shale,” he said.
Environmentalists and some local and state elected officials, among them Colorado Gov. Bill Ritter, have said the federal government has been moving forward too quickly in pushing oil shale development when uncertainty remains over what technology holds the most promise for extracting the resource. Without knowing that, it’s impossible to evaluate requirements for water, electricity and workers, and impacts on communities and the environment, they say.
The U.S. Bureau of Land Management has moved ahead with setting aside 1.9 million acres in the West, including about 360,000 acres in Colorado, for possible commercial oil shale development. By the year’s end, the agency is expected to release final rules pertaining to commercial oil shale leasing on public lands.
Shell, which is researching oil shale development technology in Rio Blanco County, supports the issuing of those rules. Shell says even though it may be 10 or more years away from commercial oil shale development, having rules in place for things such as the royalties it would have to pay would provide it with some certainty in moving forward with its plans.
The National Resource Defense Council also has criticized a provision in the recent financial industry bailout bill that provides a tax credit of 50 percent for a company’s first year of capital investment in oil shale and oil sands refineries. McEnaney fears those credits could extend to efforts by companies such as Shell to recover shale underground through methods such as heating it. The credits could further encourage oil shale development to occur too quickly and without adequate analysis of impacts, he believes.
However, the credit would expire after 10 years, which Shell spokesman Tracy Boyd said would be too soon for the company to be able take advantage of it. He said he doesn’t think it would apply to Shell’s project because by definition a refinery processes fuel above ground — after it has been produced.
Email DENNIS WEBB
